I think the bulk users, such as the junk mail guys, are the ones we first class users are supporting. These guys pay rather low rates and I cannot remember the last time I read that they had an increase in rates. Lack of competition and rather low efficiency are the problems of postal service. But they spend tons of money on Lance Armstrong

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Flash Gordon

2003 E500 BlackOpal/Charcoal

2004 Infiniti G35X

The question is how elastic is the cost of a postage? How high would prices have to be for demand to decrease? I'd say it's in the 50 cent range so why won't the Gov cut all the BS and just raise the price to where it should be? I remember when the stamp went from 29c to 32c and most experts said that 32c still won't put the postal service in the black so raise it two 35c and call it good for a few extra years?

The answer is because the postal system is supported so ALL americans have access to it. Personally I think it's a pretty good system although I rarely (2 or 3) times a year send anything via US postal people in BFE still need access to ol Mr. Hanky.(hooterville post office).

The postal service works on a three year model. The plan is to make money the first year, break even the second year and lose money the third year. The idea is for gains and losses to balance out. A lot of what they do is set by congress even though they are not really part of the government. Ever notice the free and reduced rates some groups (libraries, the blind) get? these are all gifts from congress. The post office is actually one of the more efficient operations you will see. Since labor costs are the lions share of their bills, they do what the can to automate operations. They have really done a good job. Nobody who hasn't been inside a major Post Office has any idea what they really do. The mass of mail they sort and deliver each day is amazing. They do raise the rates for bulk mailers and others. We just tend to focus on our stamps. I remember a paper growling about the increase in the cost of stamps. They were a penny a copy when the stamp was two cents. tha paper is now 50 cents. Oh and btw, we have some of the cheapest postal rates in the world. And like it was pointed out earlier, I put my letter in my mailbox, you will come to my house and get it and take it to my friend 2000 miles away for 41 cents? That is the best deal I will get this week.
Just for the record, I worked for the PO many years ago

I think the original target was 40 cents but due to ammunition price increases they threw in the extra penny.

I actually still send out my bills the "old fashioned" way and will continue to do so. At the office, we use a fair amount of first class mail. Just another cost of doing business

As soon as it is PC to do so, e-mails will likely have a federal "transaction" charge or something similar.